16 October 2017

Uganda: Charcoal Users Feel Price Heat

Steven Byamukama has been vending charcoal for 20 years. His stall in Kisenyi, a low income section of Kampala city, is one of many on a charcoal dust covered and darkened patch almost a quarter of a football field. This is a dirty job and Byamukama employs an army of young men to do the heavy lifting. He handles the cash.

Like the other traders, Byamukama sells charcoal in various sizes; from longish large loads of over 75kg bags piled up on top of each other while others are in white high-density polyethylene sacks that contrast sharply with their black contents. He also displays smaller portions doled in plastic basins and discarded one litre paint tins.

The move toward the smaller portions is a result of rising charcoal prices. Many city residents can no longer afford the sack which goes for Shs80, 000, up from Shs60, 000 last year, a 30% price leap in an economy where inflation is well below 10%. According to Dr. Cornelius Kazoora, an environmental economist who has been studying the charcoal business for some time, what is happening is a "charcoal crisis."

"Most people in Uganda are poor and the packaging of charcoal allows a person to get it for even Shs 1,000, cook a meal, and eat," he told The Independent in an interview.

Byamukama sells a 20-litre plastic basin filled to the brim for about Shs 8000, while a smaller metallic tin called "Ddebe" goes for Shs5000.

But he complains that while the charcoal business used to be quite lucrative, his buying price has risen and his margins shrunk.

"Trees have become scarce yet the population is ever growing," he says.

He describes how, when he started his business, it was easy to source good charcoal in the neighbouring districts of Luweero, Nakaseke and Kyankwanzi where the average distance is 50kms away from the city in central Uganda. These days, he says, most of the charcoal he sells comes from northern Uganda, at least 350km away.

Kazoora confirms this. He says people in the Cattle Corridor (Luweero, Nakasongola, Kyankwanzi, and Masindi) opened up land for plantation agriculture and livestock rearing-- a development which reduced woodland in this area and has eventually affected the volume and quality of charcoal that is sold in Kampala.

To get a good stock of charcoal, Byamukama and his colleagues sometimes intercept the trucks transporting the commodity before they get into the city suburbs where competition between dealers is stiff.

He told The Independent that he now buys a sack of charcoal from truck drivers at between Shs 70,000 and Shs77, 000 and sells each sack at Shs80, 000 and, depending on demand, Shs90, 000.

Khamadi Musiimenta, another trader who has dealt in charcoal for the last 20 years in a market in Kamwokya, a suburb of the city, also recalls a time recently when most of the charcoal sold in Kampala used to come from the nearby districts and one could buy a bag of charcoal at Shs20, 000.

He says he gets his charcoal from as far as Adjumani district in northwestern Uganda and sells a bag at Shs 80,000. He says this is the first time they have seen charcoal prices shoot that high.

Ephraim Zinda, 34, who has been in the charcoal transport business since 2008 told The Independent that charcoal prices could be rising because local governments in the source districts in northern Uganda are getting tougher on charcoal burners. This has led to reduced supplies. But he says corruption contributes to the high cost of transport and the eventual user price.

Zinda says along the 350km route, even before he ignites the engine of his truck headed for Kampala from Gulu, he pays anywhere between Shs700, 000 to Shs1.5 million for a General Receipt to the National Forestry Authority. Then along the way, he must leave between Shs30, 000 and Shs20, 000 at every road block in Gulu town, Bobi, Kiryandongo, Luweero, Kawempe, Bwaise, and Kasubi. Zinda says this is the reason most trucks tend to move at night to minimize these unnecessary costs.

"Otherwise we might end up with nothing by the time we reach our destinations," he says.

Charcoal remains the most preferred energy source for use in about 90% of households in Kampala while elsewhere the average is 65% with the rest using wood fuel. Overall, about 4,961 metric tonnes of charcoal is used by households in Uganda per day while institutions use a total of 887.3 metric tonnes of charcoal over the same period.

A 2015 energy ministry survey on the status of charcoal production, transportation, trade, and consumption noted that up to 2.144 million metric tonnes or 35,153,081 bags of charcoal each weighing 60kgs are produced and consumed every year in Uganda. This charcoal is valued at about US$38 million.

Wrong interventions?

Charcoal preference in Kampala is mostly a practical decision as most households do not have separate cooking areas to set up a wood fire and charcoal is more portable, smoke free, and burns hotter and longer. But with rising prices, many users and experts are looking for ways out.

Experts argue that in the longer term, economic benefits of charcoal must be replaced with new development options. They say the government needs to quickly find sustainable and safe energy options for rural and poor populations.

Currently, Uganda's entire charcoal value chain is characterised by informal and inefficient systems and has received little interest from investors. It is characterised by inadequate enforcement of regulations, poor organisation of players, use of inefficient technologies, and lack of standards and unsustainable production practices.

Interventions that are spoken about often focus more on reducing the negative environmental impact of charcoal production and use and less on addressing the need for sustainable energy supplies for a growing urban population.

Urging the government to sensitize the population about the dangers of wood-based fuels to the environment, quickly enforcing measures against illegal wood harvesting, banning illegal charcoal production, and imposing heavy fines and taxes on charcoal and firewood trade, will salvage the environment but people have to cook.

James Kakeeto, the Chief Executive Officer of Creation Energy Limited, a Kampala-based renewable energy initiative told The Independent on Sept.22 in an email that Ugandans are still struggling to switch to cleaner fuels because even with all its disadvantages, charcoal remains the most adopted cooking fuel in Uganda and, this is largely determined by the fact that it is still considered cheap compared to other options such as LPG and electricity.

To most Ugandans, LPG is considered unsafe and risky in terms of causing possible fires in households. The fact that Ugandans have used charcoal for a long time means that the attachment is high, to the extent that the people find any other new option such as briquettes an inefficient inconvenience.

Kakeeto told The Independent that weaning Ugandans off wood-based fuels cannot be done in an instant, but rather gradually.

For a start, the government needs to mobilise financial resources to make the Biomass Energy Strategy, which seeks to promote investments in efficient biomass technologies such as briquettes and energy efficient cook stoves work. That would help cushion entrepreneurs from the investment risk associated with alternative and modern cooking fuels.

Charcoal to stay

For Simon Peter Amunau, the manager of the UNDP-funded Green Charcoal Project at the Ministry of Energy and Mineral Development, charcoal is here to stay for the simple reason that electricity and LPG remains quite expensive for millions of Ugandans.

"What we need to do is to promote charcoal production in a sustainable manner," he says, "The current charcoal production techniques are wasteful with only 10% of charcoal produced in the traditional kilns."

Amunau says the ministry is promoting efficient charcoal producing technologies which are able to recover 30-45% of the charcoal.

He says if charcoal producers adopt these technologies, then Uganda will see a cut back on trees and forests which are being felled to produce more charcoal.

The energy ministry is also promoting tree planting in the districts of Nakaseke, Kiryandongo, Nakasongola, Mubende and Kiboga where already 4,000 hectares have been planted on private farms and NFA forest reserves.

Amunau said the ministry is also embarking on a campaign to work with all stakeholders along the charcoal value chain-- forest owners, charcoal producers, transporters, vendors and the users--to promote tree planting; efficient production techniques, good charcoal packaging ways to reduce moisture content, as well as promoting energy-efficient stoves.

Kazoora agrees that charcoal will remain big business for decades but making LPG cheaper can reduce demand for it. He says most people in Uganda could opt for LPG (gas) but are put off by the high cost involved and the lack of facilities for sale of small potions as happens with charcoal.

"If the government forfeited revenue in the short run and started shifting people to LPG then it would be easy to enforce laws against tree cutting," he says, "Things work better when there are alternatives."

Environmentalists are already saying charcoal has put deforestation into over drive, exacerbating already deadly climate change effects which are killing people in their homes.

Uganda is losing 60 million metric tonnes of wood every year valued at Shs 1,179,385,920,000. The government on the other hand is also losing Shs 268,516,106,157 in uncollected permit and VAT revenue that could be used to sustain the sector.

Henry Neufeldt, an expert on charcoal and climate change at the World Agro-forestry Centre in Nairobi told The New York Times in June last year that in the next 30 years, many forests and landscapes will be degraded because of charcoal demand, and because of the lack of policies to counter that effect.

Meanwhile, energy experts say charcoal users might have to brace themselves for harder times as prices continue to rise, thanks to excessive demand in the urban areas.

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